Will Google Earn from the Nexus 7?

With the first batch of Google’s Nexus 7 being already listed as sold out by retailers, what will be interesting to watch is how well this tablet is accepted by its users. However, if experts are to be believed, Nexus 7 is a comparatively good product priced at $199. They also believe that Google’s tablet hold the capacity to wipe out Amazon’s Kindle Fire from the market because Google offers better features that include a better screen and an improved version of the camera.

What is bothering professionals in the industry is that how could Google be making something out of this low price tablet.

The answer to this question came from teardown gurus at IHS iSuppli, who told All Things Digital that the 8GB version of the tablet costs Google $151.75 to make, while the 16 GB costs $159.25. Well, that is way a too thin margin. The same set of people estimated last November that Amazon approx loses about $3 on one Kindle Fire tablet. However, Reg Hardware, after some time reported that because the component prices have fallen, Amazon can now assemble the same product at $133.80.

At the same time we cannot forget that making money from hardware is not on cards for Amazon and Google at this point of time. What they really need to concentrate on is the content. What is important for Google is to be able to attract it’s users to buy books, movies, games and music from its store so as to cover the cost and earn profits.

However, experts are of the view that it is difficult for Google to come in competition with Amazon as far as its content is concerned. While Google can only offer access to movie rentals and fun apps, Amazon’s database consists of every possible thing that a user would like to have that too at the touch of a finger tip. Nevertheless, at this point of time all we can say is that it is going to be a battle between the two and we will have to wait to watch which one is given an upper hand by the users.

A report has revealed that at present, the demand for Nexus 7 is high, so much so that its retailers are already saying that they are out of stock and have placed orders for additional inventory.

A spokeswoman at GameStop told Computerworld that the company is taking pre-orders for the next round of shipments, which is expected to reach stores by August 7.